Structuring a US purchase for rental to a relative

Hi all

I've got a brother in New York who's thinking about buying a house there. I'd like to buy an investment property in the US, so I'm thinking about buying a place and he'll rent it off me. That way he can pay significantly less rent to me than the mortgage and tax payments, or to put it another way, he can afford to live in a much better house than he could afford if he bought it himself. (But still a market level of rent)

Normally I wouldn't dream about renting to a family member, but he's got a young family and I'm happy to take the risk to help him out. Also, New York is far from the top of the list of obvious places to buy a property in the US, but again, this isn't a commercial decision.

So I'm wondering if there are any innovative ways I should structure the purchase, other than just a direct purchase 100% in my name. I need the tax loss to be substantially in my name to make the deal work, but is there any advantage to me in letting him buy 1% of the property, or perhaps buying it in a unit trust? (He's a US resident but not citizen)

I'm pretty comfortable buying it straight in my name, and finances aren't an issue, assuming I can find an American lender to give me 60%-70% of the purchase price, just wondering if I should be thinking outside the box.

Cheers
Jonathon
 
Without going into the pros and cons of rent to relatives, my only suggestion would be to ensure you have a "Plan B" in case your brother has to move to an unforeseen reason and cannot continue renting a property you purchase.
Marg
 
Is foreign sourced income still segregated these days? i.e. can you offset foreign sourced losses against australian sourced income?
 
Certain foreigh losses are no longer segregated - the law changed in about 2007. For the life of me I can't understand why, but the governemnt changed the rules to allow general deductibility for overseas losses, in certain circumstances, which includes property investments.
 
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